Strategic Thinking Articles

In Search of Strategy


These are the lessons the ASAE Foundation has learned about strategy as it invests in research projects that help association executives deal more confidently with their rapidly changing environments. A dual-purpose effort is in place to pursue original research on the future while developing tools that help top leaders deal with it more effectively.
This approach brings together two of the foundation's long-standing ambitions: to reach consensus on a research agenda and to connect association management with some of the leading business schools and research institutions. The goal is to engage the nation's best management researchers in partnerships that contribute to our understanding of critical issues. 
One issue the foundation strategy is investigating is the subject of strategy itself. The notion of a three- to five-year strategic plan with fixed strategies is becoming obsolete. The new emphasis is on a strategy-making process that's ongoing, decentralized, and robust in terms of its ability to adapt quickly to changing conditions and lessons learned.
To be at the forefront of this changing perspective, the foundation teamed up with the Wharton School at the University of Pennsylvania. One of the most popular courses in the school's MBA program is Management 701. As part of this course, teams of students investigate how various organizations engage in strategy making. Because of the foundation's new relationship with Wharton, associations are now among the organizations that come under the scrutiny of the class. 
This strategy benefits associations in several ways. First, a premiere business school now recognizes association management as a part of its course work. The foundation hopes to leverage this relationship into other research opportunities with other institutions. The profession will also be in sync with cutting-edge research both as participants and as beneficiaries.
To deliver this information to the profession, the foundation's research committee will monitor Wharton's fieldwork on the strategy-development process in associations and convey its findings. Here's a summary of some of the observations from the first Wharton case study.
Strategy Making at Edison Electric: The Challenge
Although most associations talk of a rapidly changing environment, the Edison Electric Institute of Washington, DC, is dealing with one that's changing radically. EEI represents for-profit electric utilities that until recently operated as vertically integrated industries with universal demand for their services and no competition, a blissful state of being but for the many regulators. 
Abruptly and by act of Congress, deregulation began and their peaceful community became a competitive one. Many of the members will divorce their operations into separate business entities and some will migrate into other markets altogether. But for now, they're scrambling to find new business strategies--and that will require new information sources. This is a radical change. It's like lifting a rock and watching things scamper.
How should association leaders deal with this? Do they get out in front to lead the members or follow them closely to create a new association in their wake? If the industry separates into sectors with rival interests, should there be more than one association? When change poses decisions of this magnitude, does the association worry more about its members or itself? And finally, how amenable is all of this to a single retreat and a five-year plan?
Then and now
EEI began as a provider of technical information, but as energy and the environment became dominant public-policy issues it evolved into an advocacy organization with a clear strategic challenge. In an adversarial climate that unified much of the industry, its job was to translate technical knowledge and grassroots presence into favorable legislative and regulatory outcomes.
Strategy development was a straightforward process. It was member-driven, policy-oriented, and lobbyist-delivered. The core capability of the organization was government affairs, and the staff competencies included coalition and consensus building, development and articulation of persuasive positions, and an ability to influence legislative and regulatory decisions.
So how do lobbyists help engineers orient themselves to a world of competitive strategies and main street merchandising? 
The first step is simple: Form follows function. To help its members succeed as liberated capitalists, the association would need to develop functional capabilities in areas such as competitive intelligence, marketing, business alliances, and Wall Street relations. To support these functions, the association designed a new structure around the members' business operations. It also created four new departments for energy delivery, energy services, energy supply, and international issues. 
Cutting across these operations with support resources in a matrix fashion are conventional association departments for external affairs, government relations, legal, communication, finance, information technology, and member relations. Although not a matrix organization per se, the interdepartmental activities between business units and association services fabricate many critical activities into a more flexible organization. Teams can form quickly and then dissipate when they reach their objectives. Integrating departments in this manner keeps people better informed and focused on the mission.
Real-time strategic thinking
When the future is unclear and yesterday's news is too late, making the most of real-time information is essential. The challenge is to analyze it quickly, because in a radically changing environment nothing is more perishable than information. And no central authority can gather, sort, and analyze the amount of detail that's now available before it goes stale. Organizations such as Microsoft frequently throw multiple strategies at the same objective and then put in place the one that works best.
Associations, by nature and necessity, aren't that well endowed. The alternative is to turn strategic information gathering and analysis over to the operating units that have contact with the customers and their world. The central authority maintains an ongoing dialogue to provide a consistent message as to what's important. The operating units in turn provide a steady supply of information that's essentially preprocessed for strategy making. The central authority uses this information to resolve competing interests and set priorities. 
It's a continuous process, which is what distinguishes it from the three-year plan. Under the pressure of persistent change, real-time strategic thinking replaces much (but not all) of what was formerly provided by intervals of strategic planning. Time condenses under the pressure of change, to a point where planning and doing run concurrently.
Three elements demonstrate how EEI is implementing this type of system. The first involves an adaptation to the conventional weekly meeting format. Executive staff members meet every Monday at noon, and within 24 hours each of them must hold a corresponding meeting with their respective staffs to convey specific messages on critical issues. Members of the executive staff must then gather intelligence on the issues the departments are seeing as they deliver products and services and bring that information back to the next executive meeting. 
The connected nature of the staff meetings creates a dialogue with a pulse. Intelligence flows up and strategy confirmation flows down. Environmental scanning for EEI is a constant process.
Intelligence gathering can serve as a member benefit as well. An outside firm scans a wide spectrum of news publications and journals for information that affects EEI's industry in any way. Regular reports from this service go to staff and members alike. A number of associations are now doing this and featuring the information on their Web site as a member service. These two processes--a professional news-scanning service and a networked dialogue engaging all internal eyes and ears--make intelligence gathering a core capability at EEI.
Although information gathering and strategic thinking have a weekly pulse, member involvement in the strategy-making process happens in quarterly intervals. Sixty presidents of the electric utility sector form the board of directors, and members meet in concert with the executive committee four times a year. EEI sees the board as an important source of intelligence, so it methodically taps these members for information on their changing world. 
The actual strategy-making process begins with the executive staff. The CEO stresses teamwork and consensus in a fairly constant process of adjusting current strategies and developing new ones. The CEO then takes this work to the executive committee for thorough deliberation. The board meeting is more a matter of strategy testing, as this fairly representative group thinks through the wisdom and consequences of the proposed actions. EEI disproves the popular notion that associations with large boards can't move fast. 
The third element that distinguishes EEI's strategy-making process is a growing emphasis on performance measures. Measurement isn't simply a means of quantifying goals and documenting progress; instead, it provides the type of stimulation that feeds an entrepreneurial environment. In addition to fairly standard measures such as membership and revenue, EEI tracks its market share and the membership rosters of competitive organizations to monitor its appeal to various segments of the industry. It closely studies the demographic segments that participate in EEI meetings and seminars and the degree of involvement from senior management. In an industry that's migrating into many different market sectors where other associations are lurking, the mosaic match of markets and member segments becomes a key performance measure.
Customer surveys generate information on needs and the degree to which EEI meets them in each of the major segments. These measures aren't an occasional curiosity at EEI as they are at many associations. The board sets nonfinancial performance measures in place to monitor the effectiveness of the association's strategies.
Constant intelligence gathering, a pulsating strategic dialogue, and nonfinancial performance measures are three characteristics that distinguish the way EEI is dealing with radical change. It's interesting to note that a major premise of the Wharton case studies is that given the rate of change, the students aren't to judge the merits of the strategies themselves. Time will tell on that. The emphasis is on the process. 
How clearly does everyone within your association understand the strategy-making process? If senior executives are unable to quickly describe it, your association probably hasn't clearly established or explained the process. For organizations that are facing steep changes, that's the challenge.
Association Management Magazine, June, 2001

These are the lessons the ASAE Foundation has learned about strategy as it invests in research projects that help association executives deal more confidently with their rapidly changing environments. A dual-purpose effort is in place to pursue original research on the future while developing tools that help top leaders deal with it more effectively.
This approach brings together two of the foundation's long-standing ambitions: to reach consensus on a research agenda and to connect association management with some of the leading business schools and research institutions. The goal is to engage the nation's best management researchers in partnerships that contribute to our understanding of critical issues. 
One issue the foundation strategy is investigating is the subject of strategy itself. The notion of a three- to five-year strategic plan with fixed strategies is becoming obsolete. The new emphasis is on a strategy-making process that's ongoing, decentralized, and robust in terms of its ability to adapt quickly to changing conditions and lessons learned.
To be at the forefront of this changing perspective, the foundation teamed up with the Wharton School at the University of Pennsylvania. One of the most popular courses in the school's MBA program is Management 701. As part of this course, teams of students investigate how various organizations engage in strategy making. Because of the foundation's new relationship with Wharton, associations are now among the organizations that come under the scrutiny of the class. 
This strategy benefits associations in several ways. First, a premiere business school now recognizes association management as a part of its course work. The foundation hopes to leverage this relationship into other research opportunities with other institutions. The profession will also be in sync with cutting-edge research both as participants and as beneficiaries.
To deliver this information to the profession, the foundation's research committee will monitor Wharton's fieldwork on the strategy-development process in associations and convey its findings. Here's a summary of some of the observations from the first Wharton case study.

Strategy Making at Edison Electric: The ChallengeAlthough most associations talk of a rapidly changing environment, the Edison Electric Institute of Washington, DC, is dealing with one that's changing radically. EEI represents for-profit electric utilities that until recently operated as vertically integrated industries with universal demand for their services and no competition, a blissful state of being but for the many regulators. 
Abruptly and by act of Congress, deregulation began and their peaceful community became a competitive one. Many of the members will divorce their operations into separate business entities and some will migrate into other markets altogether. But for now, they're scrambling to find new business strategies--and that will require new information sources. This is a radical change. It's like lifting a rock and watching things scamper.
How should association leaders deal with this? Do they get out in front to lead the members or follow them closely to create a new association in their wake? If the industry separates into sectors with rival interests, should there be more than one association? When change poses decisions of this magnitude, does the association worry more about its members or itself? And finally, how amenable is all of this to a single retreat and a five-year plan?

Then and nowEEI began as a provider of technical information, but as energy and the environment became dominant public-policy issues it evolved into an advocacy organization with a clear strategic challenge. In an adversarial climate that unified much of the industry, its job was to translate technical knowledge and grassroots presence into favorable legislative and regulatory outcomes.
Strategy development was a straightforward process. It was member-driven, policy-oriented, and lobbyist-delivered. The core capability of the organization was government affairs, and the staff competencies included coalition and consensus building, development and articulation of persuasive positions, and an ability to influence legislative and regulatory decisions.
So how do lobbyists help engineers orient themselves to a world of competitive strategies and main street merchandising? 
The first step is simple: Form follows function. To help its members succeed as liberated capitalists, the association would need to develop functional capabilities in areas such as competitive intelligence, marketing, business alliances, and Wall Street relations. To support these functions, the association designed a new structure around the members' business operations. It also created four new departments for energy delivery, energy services, energy supply, and international issues. 
Cutting across these operations with support resources in a matrix fashion are conventional association departments for external affairs, government relations, legal, communication, finance, information technology, and member relations. Although not a matrix organization per se, the interdepartmental activities between business units and association services fabricate many critical activities into a more flexible organization. Teams can form quickly and then dissipate when they reach their objectives. Integrating departments in this manner keeps people better informed and focused on the mission.

Real-time strategic thinkingWhen the future is unclear and yesterday's news is too late, making the most of real-time information is essential. The challenge is to analyze it quickly, because in a radically changing environment nothing is more perishable than information. And no central authority can gather, sort, and analyze the amount of detail that's now available before it goes stale. Organizations such as Microsoft frequently throw multiple strategies at the same objective and then put in place the one that works best.
Associations, by nature and necessity, aren't that well endowed. The alternative is to turn strategic information gathering and analysis over to the operating units that have contact with the customers and their world. The central authority maintains an ongoing dialogue to provide a consistent message as to what's important. The operating units in turn provide a steady supply of information that's essentially preprocessed for strategy making. The central authority uses this information to resolve competing interests and set priorities. 
It's a continuous process, which is what distinguishes it from the three-year plan. Under the pressure of persistent change, real-time strategic thinking replaces much (but not all) of what was formerly provided by intervals of strategic planning. Time condenses under the pressure of change, to a point where planning and doing run concurrently.
Three elements demonstrate how EEI is implementing this type of system. The first involves an adaptation to the conventional weekly meeting format. Executive staff members meet every Monday at noon, and within 24 hours each of them must hold a corresponding meeting with their respective staffs to convey specific messages on critical issues. Members of the executive staff must then gather intelligence on the issues the departments are seeing as they deliver products and services and bring that information back to the next executive meeting. 
The connected nature of the staff meetings creates a dialogue with a pulse. Intelligence flows up and strategy confirmation flows down. Environmental scanning for EEI is a constant process.
Intelligence gathering can serve as a member benefit as well. An outside firm scans a wide spectrum of news publications and journals for information that affects EEI's industry in any way. Regular reports from this service go to staff and members alike. A number of associations are now doing this and featuring the information on their Web site as a member service. These two processes--a professional news-scanning service and a networked dialogue engaging all internal eyes and ears--make intelligence gathering a core capability at EEI.
Although information gathering and strategic thinking have a weekly pulse, member involvement in the strategy-making process happens in quarterly intervals. Sixty presidents of the electric utility sector form the board of directors, and members meet in concert with the executive committee four times a year. EEI sees the board as an important source of intelligence, so it methodically taps these members for information on their changing world. 
The actual strategy-making process begins with the executive staff. The CEO stresses teamwork and consensus in a fairly constant process of adjusting current strategies and developing new ones. The CEO then takes this work to the executive committee for thorough deliberation. The board meeting is more a matter of strategy testing, as this fairly representative group thinks through the wisdom and consequences of the proposed actions. EEI disproves the popular notion that associations with large boards can't move fast. 
The third element that distinguishes EEI's strategy-making process is a growing emphasis on performance measures. Measurement isn't simply a means of quantifying goals and documenting progress; instead, it provides the type of stimulation that feeds an entrepreneurial environment. In addition to fairly standard measures such as membership and revenue, EEI tracks its market share and the membership rosters of competitive organizations to monitor its appeal to various segments of the industry. It closely studies the demographic segments that participate in EEI meetings and seminars and the degree of involvement from senior management. In an industry that's migrating into many different market sectors where other associations are lurking, the mosaic match of markets and member segments becomes a key performance measure.
Customer surveys generate information on needs and the degree to which EEI meets them in each of the major segments. These measures aren't an occasional curiosity at EEI as they are at many associations. The board sets nonfinancial performance measures in place to monitor the effectiveness of the association's strategies.
Constant intelligence gathering, a pulsating strategic dialogue, and nonfinancial performance measures are three characteristics that distinguish the way EEI is dealing with radical change. It's interesting to note that a major premise of the Wharton case studies is that given the rate of change, the students aren't to judge the merits of the strategies themselves. Time will tell on that. The emphasis is on the process. 
How clearly does everyone within your association understand the strategy-making process? If senior executives are unable to quickly describe it, your association probably hasn't clearly established or explained the process. For organizations that are facing steep changes, that's the challenge.
Association Management Magazine, June, 2001

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